DE30: Stocks lack direction after opening higher

• European stocks gain on Thursday

• DE30 moves sideways below 10,400 pts handle

• German government offers boost to credit insurers

Most of the major stock market indices from the Old Continent trade higher on Thursday. However, gains are not big and are being erased. FTSE 100 (UK100) is the only major European index to trade below the flatline. When it comes to risk events ahead in the day, traders should focus especially on US jobless claims data (1:30 pm BST).

Merkel announced steps of economy reopening

Chancellor Angela Merkel outlined steps for gradual reopening of the German economy. Most of the restrictions will remain in place until May 3. However, smaller shops will be allowed to reopen next week. Students are expected to return to schools and universities at the beginning of May. On the other hand, there is no set timeline for reopening of restaurants, bars and gyms. Big events, like football matches or concerts, will not resume until at least the end of August. Border controls will remain in place for at least the next 20 days. Cautious approach seems to be justified given that the number of new cases in Germany jumped back above 2,500 for the first time this week yesterday.

Source: xStation5

DE30 remains within the large Overbalance structure (red box). The index plunged overnight to below 10,200 pts but started to recover later on. Index reversed before reaching the resistance at 10,500 pts. However, in case the index was to regain ground and rush towards 10,500 pts, bulls should keep on guard. A potential head and shoulders pattern can be spotted on DE30 chart with 10,190 pts serving as a potential neckline. Should the second shoulder be painted on the chart, a drop towards 9,900 pts may follow. Realizing the range of the pattern would mean breaking below crucial 10,000 pts support - a development that may make outlook more bearish in near-term.

DAX members at 10:17 am BST. Source: Bloomberg

Infineon Technologies (IFX.DE) gains along with other European semiconductor stocks. Improvement in moods came after Asian TSMC said it expects sales to grow around 30% YoY this quarter. The fact that Apple (AAPL.US) unveiled the first low-cost iPhone model also helps sentiment in the semiconductor sector.

German government agreed on a €30 billion euro backstop for credit insurers. The move came amid concerns that insurers may be reluctant to maintain coverage amid significant economic distress. However, insurers will still be responsible for any losses exceeding €30 billion. Euler Hermes, subsidiary of Allianz (ALV.DE), is one of the biggest beneficiaries of the measure.

Volkswagen (VOW3.DE) announced that it will begin reopening production plants outside China, starting from next week. Electric car plant in Zwickau, Germany and factory in Bratislav, Slovakia will be the first to open. Sites in Spain, Portugal, Russia and the United States will reopen one week later. Daimler (DAI.DE) said that three engine production sites in Germany will resume operations next week.

Analyst actions

• Lufthansa (LHA.DE) cut to "sell" at Deutsche Bank. Price target set at €5.70

• HelloFresh (HFG.DE) rated "hold" at MainFirst. Price target set at €29

• Osram (OSR.DE) cut to "sell" at DZ Bank. Price target set at €27.10

Infineon (IFX.DE) is trading higher today, thanks to a solid Q2 forecast from TSMC. The stock managed to halt yesterday's decline near the lower limit of the local market geometry therefore another upward bounce may be looming. The first target to watch is the 50-session moving average that limited the recent rally (green line, €17 area). Source: xStation5